Governance and culture within employee-owned companies

Abstract

PurposeThe purpose of this paper is to examine the type of governance dominant within employee-owned companies established as an Employee Stock Ownership Plan (ESOPs) and to ascertain if governance follows the agency or stewardship theory of governance.Design/methodology/approachA sequential mixed method (Quantitative/Qualitative) research design was used with a convenience sample of employee-owned companies who were members of The ESOP Association (TEA). The Stewardship Climate Scale (SCS) was used as the quantitative instrument and structured interviews were used as the qualitative instrument.FindingsA majority (96%) of ESOPs participating in the study self-identified as stewardship governance, only 6 of the 154 companies (4%) self-identified as having agency governance.Research limitations/implicationsThere is a potential of self-report bias based on the use of convenience sampling which should be minimized based on the large number of participants. The study was not able to examine the relationship between stewardship and productivity.Originality/valueThis is the first large scale research study examining governance within employee-owned companies.